Which of the Following Statements Is True as It Relates

question 27

Multiple Choice

Which of the following statements is true as it relates to limited liability partnerships?

• A) Only senior partners are liable for the partnership's debts.
• B) Partners have no liability in a limited liability partnership arrangement.
• C) Partners are personally liable for the acts of those under their supervision.
• D) All partners must be AICPA members.

---

Definitions:

Indirect Bankruptcy Costs

Expenses related to bankruptcy that are not direct costs such as legal and administrative fees, including damage to corporate reputation and loss of business opportunities.

Corporate Default

A failure of a company to fulfill its financial obligations, such as missing a debt payment.

Lost Sales

Revenue that a company could have earned but didn't, due to stockouts, inadequate capacity, or other factors.

Debt/Equity Ratio

An indicator of how the financing of company assets is divided between shareholder equity and debt.